Smart payment cards capable of anticipating fraud in-store

Payment fraud continues to undergo a constant increase. Although solutions exist for detecting it, they often come too late. But what if payment cards of the future could prevent fraud in-store before it occurs?

Theft, corrupt terminals and dishonest merchants – bank security continues to face a number of threats. But where there are threats there are solutions. And those about to be launched herald a minor revolution!

Today, solutions for monitoring fraud

The EMV

Since 1995, the EMV (Europay Mastercard Visa) standard has been the most recognized solution for combating fraud. It relies on a secure component which authenticates the payment card and ensures that the transaction is correctly validated by a specific cardholder. “System security has been reinforced since the 1990s, particularly with the move from SDA (Static Data Authentication) to DDA (Dynamic Data Authentication). This makes card-cloning almost impossible”, explains Antoine Vilain, Product Line Director at OT. This is demonstrated by the fact that the United States, one of the last pockets of resistance, is currently in the process of mass migration to this technology.

“In terms of online payment, another proposed change is OT MOTION CODETM, a payment card with a dynamic cryptogram offering maximum security while guaranteeing optimal user-friendliness for the end customer.”

Scoring

Banks are the biggest victims of fraud, but are now able to protect themselves by monitoring unusual spending patterns. Scoring allows them to identify any suspicious and potentially fraudulent behavior based on certain predefined criteria. “If your bank realizes that you are making purchases in two different countries at similar times, an alert will be triggered to warn you. The aim is to guarantee the security of transactions and offer the maximum protection to cardholders.” Although this method has proved efficient, it has its limitations. Detection often comes too late, since banks cannot always carry out all the necessary checks in real time.

Tomorrow, super-smart cards to anticipate fraud

Proactive rather than reactive

OT proposes to improve alerts received by the bank and, in some cases, even block potentially fraudulent transactions before they take place. “The aim is to be proactive. Our solution allows new functionalities to be added directly into the card, in order to analyze scenarios in real time.” The bank is therefore alerted as soon as unusual behavior is identified in-store.

“EMV Smart Sensor technology makes it possible to adapt the card’s behavior. For example, it is capable of recognizing transactions that are characteristic of a stolen card and blocking itself if necessary.”

Intermediate levels of response exist, based on the behavior detected or on the customer. “For example, the card can create an alert triggering a call to the cardholder to validate the purchase. But responses are always in real time, based on the specific context.” This is a real advantage, considering that it often takes several days before a fraud is detected.

This solution is not designed to replace existing scoring methods deployed by banks, but to complement them by making use of currently unused EMV transaction fields.

This new generation of super-smart card offers additional security to users, to banks in the event of internal misconduct and to retailers whose terminals can be hacked.

“These new cards address reality and practical needs on the part of banks. We need to adapt to the latest methods employed by cybercriminals and offer solutions tailored to consumer behavior. Our objective is to secure all purchases and EMV Smart Sensors is one solution.”

By its very nature, the banking sector must innovate constantly. These pro-active cards are part of a user-centric approach to continuously improve security.